Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

Base rate falls to 0.5% while Bank plans £75billion cash boost

05 March 2009 / by Rebecca Sargent

The Bank of England has today announced that UK interest rates have fallen to 0.5 per cent as the Government battles to save the economy.

The interest rate cut was widely anticipated by market analysts and was announced alongside a £75billion asset purchase scheme, which will effectively inject more money into the economy.

Known as quantitative easing, the asset purchase scheme will allow the Bank of England to buy up gilts and pump fresh money into the economy, which is why it is often referred to as akin to printing more cash.

The move is unconventional, but is in response to the fact that more needs to be done to boost the economy, Ben Thompson, director of mortgages at Legal & General, said:

"We're so far into unchartered territory that Mervyn King must feel like Captain Cook. Few people know what to expect from quantitative easing and no-one knows how long the base rate will stay this low.

"The threat of deflation is hanging over our heads like an axe and all the while many people who want to take advantage of the depressed housing market to buy their first property or trade up are prevented from doing so because of the lack of mortgages available."

The announcements from the Bank of England have been met with mixed reactions across the board.

Adrian Coles, director general at the Building Societies Association (BSA), referred to the interest rate cut of 0.5 per cent as "a kick in the teeth for savers", while welcoming quantitative easing saying:

"We share the Government's hope that this will increase the flow of money in the economy and lessen the severity of the downturn."